Security Blockbuster: Optiv Security Acquired By Private Equity Firm KKR

Security solution provider giant Optiv Security is changing private equity hands, announcing Tuesday that KKR & Co intends to acquire the Denver-based company.

Terms of the deal were not disclosed.

Under the terms of the deal, KKR will own a majority stake in Optiv, adding it to an $18 billion portfolio that includes a number of information security companies, including Darktrace, Ping Identity and Cylance.

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Optiv is currently primarily owned by private equity firm Blackstone Group, which will maintain a minority interest in Optiv, the company said. While Blackstone has proved critical to establish the company's strategy and wide breadth of offerings, Optiv CEO Dan Burns said the move to KKR will "enable our company to better help global clients address their full range of cyber risk and security needs in a customized and integrated fashion."

’More and more organizations are seeking an end-to-end cybersecurity solutions provider at scale that has awareness over every domain of cybersecurity and the ability to execute a comprehensive security strategy,’ Burns said in a statement. ’We are excited about this agreement and look forward to working with KKR to become the world’s most advanced, most comprehensive and most trusted partner for cybersecurity solutions.’

Optiv has played an influential role in the security market since early 2015, when it closed the merger between security powerhouses Accuvant and FishNet Security. Accuvant had been owned by Blackstone. The combined companies created a $1.5 billion security behemoth, which assumed the name Optiv in April 2015.

Optiv has continued to expand since the merger, unveiling the acquisitions of identity and access management company Advancive in April, third-party risk application company Evantix in May, and New England security solution provider Adaptive Communications in June.

In November, Optiv filed for its initial public offering of stock, looking to raise $100 million. At that time, Optiv reported revenues of $947 million for 2015. It's not clear how the changing of private equity control will affect Optiv's planned IPO, the proceeds from which it said it would put toward general corporate purposes and to pay down its significant debt, which totaled $651.8 million at the end of September.

Herald Chen, co-head of KKR's Technology, Media & Telecom investment team, said KKR was looking to invest in Optiv for its "market leadership as a critical partner and advisor to the Global 1000" in a market for cybersecurity that has become a "growing focus and pain point for companies."

’For KKR, this investment is premised on partnering with an awesome management team to build Optiv into a global security powerhouse by accelerating investment in Optiv's product and service capabilities and expanding its presence across the U.S. and internationally," Chen said in a statement.

The deal is expected to close in the first quarter of 2017.